Photographer: Jacob Kepler/Bloomberg
The End of the U.S. Housing Shortage Is Finally in Sight
The shortage of listings that has defined the U.S. home sales market in recent years will begin to ease in the second half of 2018, according to a new report, but not before setting a record for consecutive months of decline.
Increased inventory will help slow price appreciation, especially at higher price points, according to the report, published Wednesday by Realtor.com. That will come as welcome news after the S&P CoreLogic Case-Shiller 20-city index this week showed that prices rose 6.2 percent in September from a year earlier, the largest increase in more than three years.
Inventory has decreased on a year-over-year basis in each of the past 29 months, according to the National Association of Realtors. The longest streak on record is 30 months.
Relief is unlikely to come all at once, and some metropolitan areas will benefit before others, according to Danielle Hale, chief economist at Realtor.com. Florida metros occupy half the slots on Realtor.com’s list of areas where prices will grow the most next year.
Homebuilding is finally catching up with demand, Hale said. Construction can have a chain-reaction effect on inventory, because buyers of newly built homes are often sellers of existing ones.
“I think it will be a three-year recovery process to get back to normal,” Hale said. “We’re still going to be in a shortage situation in much of the country.”